Portugal Tests Santander’s Interest in BES, El Economista Says

Portugal’s central bank is sounding out Spain’s Banco Santander SA and Portuguese lenders to gauge their interest in investing in Banco Espirito Santo SA, El Economista newspaper reported.

The Bank of Portugal has contacted Banco Comercial Portugues SA and Banco BPI SA about helping to bolster BES’s capital, the Spanish newspaper said today, citing people close to the regulator it didn’t identify. A spokesman for Santander, who asked not to be identified in line with its policy, declined to comment by phone today.

Investor concerns that difficulties in repaying debt among companies of the Espirito Santo group will spread to the bank have prompted a slump in the lender’s shares and subordinated debt this month. Bank of Portugal Governor Carlos Costa said in an interview with broadcaster TVI this week that shareholders are interested in injecting more capital into BES, without identifying them.

BES shares fell as much as 4.5 percent and were 1.2 percent lower at 41.4 euro cents as of 10:20 a.m. in Lisbon today.

Santander Totta, the lender’s Portuguese unit, earned 42.1 million euros ($57 million) in the first quarter and had gross loans of 27 billion euros and 18.6 billion euros of deposits.

Spokesmen for BCP and BPI weren’t immediately available to comment.

To contact the reporter on this story: Macarena Munoz in Madrid at mmunoz39@bloomberg.net

To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net Simone Meier

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